In purifying the cGMP-stimulated cyclic nucleotide phosphodiesterase from calf liver, two "low Km" cAMP phosphodiesterases were separated from the cGMP-stimulated phosphodiesterase and from each other. One "low Km" form hydrolyzed cAMP with a Km of about 0.5 MuM and was very sensitive to inhibition by cGMP and cilostamide; the other form hydrolyzed cAMP with a Km of about 2 MuM and was sensitive to inhibition by Ro 20-1724. These two forms may be analogous to two "low Km" forms in rat adipose tissue and 3T3-L1 adipocytes. During differentiation of 3T3-L1 adipocytes, particulate low Km cAMP phosphodiesterase activity appears (or increases markedly) which can be activated by lipolytic hormones and insulin and is sensitive to inhibition by cGMP and cilostamide. Soluble cAMP phosphodiesterase activity in these cells is not apparently hormone-sensitive and is inhibited by Ro 20-1724 and insensitive to inhibition by cilostamide and cGMP. With the purified cGMP-stimulated phosphodiesterase, the competitive inhibitors papaverine, dipyridamole, and IBMX stimulated hydrolysis of 0.5 muM cAMP, whreas cilostamide did not. In addition, IBMX was a more effective inhibitor that theophylline. The competitive inhibitors which stimulated hydrolysis at low substrate concentrations mimicked substrate and brought about allosteric transitions that increased catalytic activity. Cilostamide inhibits, perhaps at catalytic sites, without apparently inducing the allosteric transitions. From studies with a series of xanthine analogs, derivatives with propyl substitutions at positions 1 and 3 of the purine nucleus are more effective inhibitors than those with methyl group substitutions (i.e., theophylline, 8-C1 theophylline and caffeine).